How about “distribute them among the fricking workers” ? Since they’re the ones doing the work and all, radical minds might opine they’re entitled at least a hint of a smidge of the profits generated by their labour.
Plus handing them money would drive up consumer demand, which in turn creates jobs (or increased profits through artificial scarcity, whichever you feel like doing).
So, when you sell your house and end up with more money than you paid for it, do you plan to give some of the profit to the fricking carpenters, etc. who built your house? Since they’re the ones who did all the work and all, radical minds might opine they’re entitled at least a hint of a smidge of the profits generated by their labor…
Presumably, if this were the way the housing market worked then there would be a much lower entry price for buying a house. After all, the builders would not just reap the capital gains off of the first person to buy and sell, but for every subsequent owner as well. This makes me think that the idea would essentially end up being the equivalent of what we have in the rental market today, only where the builders reap the profits instead of the landowner.
I am not familiar enough with real estate to play out the full ramifications of this idea in my mind, but I have done a similar thing with software. Most of the time I have worked for a wage, where I get paid a higher amount for the job and have no rights to any royalties, while on one contract I did the work “for free” in return for a percentage of the sales revenues. I think in either scenario, knowing the terms ahead of time is essential to weighing the risks.
Back to our discussion, some would probably argue that many of today’s workers are already substantially under-paid when compared to their fore bearers, which is why we have such growing levels of income inequality. If so, then really the only “fair” solution would be that they should reap a higher portion of the profits, much as I did with my royalties example.
On the other hand, imagine if every worker were paid at “contractor” levels. Then their wages would be much higher, and they would have been fairly paid and would have no claim to the company profits. The problem is that owners seem to want the best of both worlds – low wages and no sharing of profits. I think there needs to be a shift a little bit away from this model.
I suppose the obvious difference here is that my house is not dependent on those laborers to continue laboring 40+ hours a week in perpetuity to keep the house standing. I also don’t expect them to forgo working on other homes either.
But of course much like workers in a corporation, the workers on your home are not entitled to profit sharing any more than corporate workers because they didn’t contribute capital into ownership.
I have to laugh when the Right characterizes Obama or Democrats as “tyrants” or “fascists” or make references towards the Nazis. I see these right-wing militias in the news:
Fervent nationalism
Armed to the teeth
Running around doing drills in balaclavas and para-military uniforms
Anti immigration
Maybe they aren’t all racists, but they do attract the white supremacist, anti-gay, anti-minority crowd.
Hate-filled, xenophobic rhetoric
Scapegoating of liberals, immigrants, minorities and the poor (who are sucking this country dry)
I think someone needs a history lesson in circa 1930s Germany
The best vehicle for driving down inequality is to use market forces. Drive down unemployment, using the same tool the Fed has been using the the past six years: the purchase of Treasuries with newly created Fed money. It puts more money in the economy, which in turn creates jobs. I’d also increase taxes on the very rich, but that’s not absolutely necessary. Increasing the salaries and wages for working people inevitable reduces the profits of the very rich. Profits are, by definition, the difference between what you pay people, an the value of their work.
You reduce profits, while increasing wages, you automatically reduce the income gap.
It’s not even something that “could be argued” - it’s factual data. Average wages for workers in the US, adjusted for inflation, have essentially flatlined since the 60s. Meanwhile, the cost of living has increased so in essence the “actual” average wages and purchasing power have steadily decreased.
I can’t tell if that’s a yes or a no. But it’s the same principal, so those advocating what Kobal is advocating either say “yes”, or they don’t actually accept the principal. I don’t know where you fall in that camp.
How do you know their “fore bearers” weren’t overpaid? There is no objective measure of the value of something, only what others are willing to pay for it. And there is no reason to think that the value of something won’t change over time.
On a personal level, I agree with you. That is to say, I have started two small businesses in my lifetime, and each time I did so I instituted profit-sharing for the folks who worked for me. I thought it was a good business practice. But one size does not fit all, and I don’t think there is any particular reason to legislate it one way or another (if that is what you are suggesting.)
That’s capital appreciation not allocation of value generated by the worker. When we talk about allocation of value between capital and labor talking about the allocation of wealth between labor and capital in the value formation stage. NOONE is arguing that the carpenter that built a home should have some continuing interest in that home. They are saying that the guy who provided the capital shouldn’t walk away with so much compared to the guy who provided the labor. You might as well say that the guy that built the Ferrari 250 GTO should get a cut when the car gets sold at auction for $35 million.
It’s the exact same principle as what Kobal originally posted. Imagine a typical upper-class person who has house-cleaners, maintenance workers and and gardeners all keeping his house up. There was probably a gardener there at least once per week for years. Why isn’t the gardener due a share of the profits? Or the painter that was hired to spruce the place up? If all you gain on the sale of the house is the cost of the painting, then there is no point in doing the painting-- let the new owners do that.
If you insist on a more direct comparison, think of the guy who flips a house. He buys a house fore 150k, puts 50k worth of upgrades in it (all due labor by some tradespeople) and then sells it for 200k. Why don’t the tradesmen get a piece of that 50k?
I think the point that is being made is that as real aggregate wealth and income increases, virtually all of the increase is going to a smaller and smaller segment of the population. The rising tide is lifting some ships while the rest seem to be treading water.
Oh, I’m sure there are plenty of people willing to argue the point.
For myself, it is even worse than that: my own wages nose-dived after 2008, and I now find myself back to the level I was at 20 years ago. That is in absolute amounts, by the way, and not adjusting for inflation. (I would have been comparatively happy if my wages had merely “flatlined” instead of losing altitude the way they did.)
Thanks for the link, though. It looks like interesting reading.
Ideally, if you hired me for a remodel and I knew you were about to sell your house, I might negotiate a lower wage in exchange for a cut of the profits. (That is assuming I had something to bring to the project that others could not provide.) But if I understood that you planned to live there for the next five years, my price would obviously be higher (regular “market” rates).
So I am neither a “yes” nor a “no” in general. I tend to sway my opinion depending on who holds the most power in any situation, and then I tend to side with the underdog.
I agree that value will change over time. But as for an objective measure? One way could be the level of wealth inequity as has been suggested here. If it increases outside of some range, then it is likely that profits are being retained unfairly at the expense of the workers. I think we as a society should be aware of these issues and take them closer to heart.
I once worked for a company like that. It gave me a much greater sense of loyalty to the owners than I had felt at other places I have been, so I think you are right about it being good business practice. But no, I am not suggesting that legislation is the answer to the problem. At least not directly.
And note that if there is a loss, you will share in that loss. As would the workers in a company, per Kobal’s idea, above. If workers get part of the profits in good times, they will get part of the loss in bad times. People seem to think that every business just prints money, but most go out of business at some point.
I don’t know how we determine what is “fair”.
But here’s the thing-- not everyone wants to work like that. It’s very common in some industries, but not so common in others. There are lots and lots and lots of people who just want to make a salary and not have to worry about the ups and downs of the market, especially if they are at the bottom rung of the company and can’t really have an effect on just how profitable the company is. My companies were quite small, and my workers were highly skilled, so that sets it up for profit/loss sharing. One expects a lower base salary, with the upside potential of bonuses when profits are good.
They already do - they get shitcanned. Trouble is, these days they also sometimes get shitcanned when the company does good profits, because it translates into a short-term bump in stock prices…
But yours is not the paradigm we’re really talking about.
When people rant about inequality in wages and the societal damage they do, they think about things like WalMart which pays its drones so little they have to go on food stamps, despite being the largest and most profitable store chain in the US and amassing profits larger than some nations’ GNP. They think of large corporate structures where the remuneration for the upper brackets of the company have gone from 4x the salary of their average employee to 16, 20, sometimes even 40x that. All those shifts happening, symbolically speaking, at the point where “employees” become “human resources”.
The problem is not really a structural one - i.e. salary vs. royalties, or capitalism vs. something else, or a situation forced organically by market dynamics and competition - but more a cultural one IMO.
I mean, we can state from the get go that the state of the American economic zeitgeist is not the natural and inevitable result of a capitalist society or the current global economy, since other first world nations & societies don’t share it (or at least share it much more moderately and have systems in place to prevent those shifts from going too far out of whack)
I guess I just don’t understand this attitude. When in US history have we had a more free and liberal society than we do right now? That doesn’t mean there are no problems but we have never had it better and it will continue to get better.
Oh, well, you know, the classics. Guillotines on town squares and that.
More seriously, I have no idea. Stronger, more popular, more “aggressive” unions would be a good start - I think the problem solves from the bottom up, not from the top down if you follow my meaning.
But then I would, wouldn’t I ? I’m French. Going on strike is what we *do *:p.
